This month, Jason Weaver discusses the magnificent 7, the H.O.P.E. framework and employment.
MAGNIFICENT 7
7 of the top performing stocks in the S&P 500 in 2023
META, AAPL, AMZN, GOOGL, MSFT, TSLA, NVDA
These 7 stocks now make up almost 30% of the S&P 500 and have accounted for nearly all of the 2023 gains.
Sparked by the rise of AI and expectations that the Fed will start cutting rates.
Looks similar to the Nifty Fifty (1960s to early 1970s): a group of 50 large-cap, blue-chip U.S. stocks gained immense popularity among investors. They became overvalued and heavily concentrated in the market indices. When the 1973-1974 bear market hit, many of these stocks faced substantial declines.
H.O.P.E. FRAMEWORK
HOPE gives a roadmap for how the Economy responds to changes in rates
H = Housing
First to slow and serves as a great leading indicator
O = Orders
2nd to slow and tracked with ISM data
P = Profits
3rd to slow tracked as companies report earnings
E = Employment
Last to slow, usually the most lagging part of the economy
EMPLOYMENT
The last to slow, usually the most lagging part of the economy
The labor market remains resilient in the US
In the June 2023 jobs report, 209k jobs were added and the unemployment rate dropped to 3.6%
